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Snap, once the darling of the YA social media scene, has faced some obstacles in 2022, with Q2 revenue and daily active users (DAUs) coming in well below already-diminished expectations, and a steep resulting stock drop. Snap declined to provide guidance for Q3 sales or earnings, due to “uncertainties” regarding the state of the increasingly cutthroat and hyper-competitive advertising market. With the growth of more competitors and rivals, and the same inflationary pressures facing every other media and social media company, demand for ad space on Snapchat has crashed, leading to significantly lower rates. In response, the company vowed to cut costs and pump the brakes on new hiring, alongside a “renewed focus on productivity.” (Layoff rumors are already in the air.)
So that was the bad news… but there is still a ray of hope for Snap out there on the horizon. The company’s new subscription tier, Snapchat Plus, has already hit 1 million sign-ups after only around six weeks in operation. The membership plan – which costs $3.99 per month – launched in the US, Canada, the UK, and a few other countries with a small list of launch features, including the option to change your icon on the app and the ability to see who has rewatched your Stories.
This week, they’re adding four more features: “Priority” replies, which will make your replies the first that are visible to high-follower Snapchat users; the ability to select an emoji that friends will see after your Snaps; new exclusive backgrounds for your personal “Bitmoji” character; and new icons to replace the standard Snapchat button on your homescreen. There are a few other fun little add-ons, with more on the way, but you get the basic idea. It’s a premium VIP Snapchat experience for hardcore fans and frequent users.
Snapchat currently has around 347 million average DAUs, so Plus subscribers don’t yet represent even 1% of the total app population. If Snap could figure out how to motivate a lot more of these filthy casuals to subscribe, that might ultimately be enough to start turning things around more generally. But how?
Writer Adario Strange of Quartz had an interesting suggestion: put “Snap Originals” content behind the Snapchat Plus wall and make it a hybrid streaming service. Snap already produces a variety of programming – a youth-focused mix of reality shows and scripted series – for the app, specifically designed to be viewed on mobile devices. If you’re not a Snapchat regular, you may be surprised to learn that it’s a relatively deep catalog, and it’s all available to stream for free.
Snap’s head of original content Vanessa Guthrie recently departed the company, having spearheaded more than 150 original programs, and expanded the Originals beyond the U.S. into the UK, India, and Canada. The shows and films have featured Ryan Reynolds, Will Smith, Kevin Hart, Danny Trejo and most recently, rapper Megan Thee Stallion and TikTok star Addison Rae.
The Icarus-like rise and plummet of Quibi may have poisoned founders and investors alike on the idea of a mobile-exclusive streaming platform. But if anyone was going to make it work, it would be Snap, which already has a thriving content library living on its app that’s expanding all the time, and has pre-existing relationships with Hollywood studios, celebrities and social media influencers that could potentially grab the attention of the right demographic.
Unlike Quibi, the fate of the entire company wouldn’t rise and fall on luring in brand-new sign-ups; it’s already a robust platform with a membership program that’s using the content as an added inducement to subscribe, more like Amazon or Apple’s model than Netflix. — Lon Harris
LA Tech Week Dispatch: NFT Cocktails, Sushi and Networking
At L.A. Tech Week’s opening night mixer in Santa Monica, the running joke is that some events are “harder to get into than Harvard.” Which appears, at least anecdotally, to be true.
LA Tech Week: The Landscape for LA's Proptech Startups
At its home base in Culver City, 3D printing construction company Azure Printed Homes hosted a meetup where budding proptech founders shared successes, struggles and advice with those seeking to start their own companies.
GrayMatter Robotics Raises $20M
The Gardena-based industrial robotics firm will use its Series A round to accelerate hiring of engineering and development staff to automate factory tasks the company deems too boring or ergonomically challenging for humans.
TikTok Launches Text-to-Image Generator AI Greenscreen
TikTok has added an “AI greenscreen” feature to its app, which lets users put in a text prompt the AI then renders in image form. It's one more tool creators can use in their videos.
LA Tech Week: A Case for the CryptoMondays
L.A. Tech Week starts not with a bang, but a blow dry and crypto vibes. We check in on Prept and Cryptomondays' pre-event events.
What We’re Reading...
- USC unveils its new Ganek Immersive Studio, providing students with cutting-edge new storytelling technology, including augmented reality and real-time game development.
- Long Beach’s Rocket Lab aims to launch its 150th satellite in mid-September.
- Oxnard-based manufacturer Bowlus claims its Volterra will be the world’s first all-electric RV.
- Marketing and content production company Trailer Park Group purchases Dark Burn Creative, which produces trailers for video games..
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